Duh. If sales are down 30% you need 30% fewer dealers for those that remain to have the same sales as last year.

My 6th grader could have figured that out. NOT NEWS

12:16 pm January 27, 2009

Pilm wrote :

auto dealerships have become ridiculous display rooms in the last 10 years. cut all the glitz and sell cars on the internet. if someone wants to see a car show it to them on the lot. without all the extra crap you don't need to markup as much.

12:20 pm January 27, 2009

R Wiggler wrote :

So Chrysler is pushing its dealers to further increase their inventory of cars that do not sell in order to keep producing cars that do not sell. Sounds like a sound business plan for the future.

12:24 pm January 27, 2009

Maxx wrote :

If only the honest car dealerships were to remain, there would be very few indeed.

12:34 pm January 27, 2009

alg wrote :

Maxx - I'd be curious to know what line of work you're in.

12:37 pm January 27, 2009

TeresaE wrote :

As the daily announcements of customer firings (aka "layoffs") runs rampant, is it any wonder?

We have off shored our customers and now it is catching up with all industries.

Duh.

12:53 pm January 27, 2009

JOE wrote :

HOW ARE YOU GOING TO PURCHAE A NEW CAR WITH OUT A JOB? LET THE GOV. KEEP HANDING OUT OUR TAX DOLLERS FOR NOTHING.

1:22 pm January 27, 2009

mfurey wrote :

dishonest car dealers? dishonest salesman? maxx, i would bet the house that the phrase buyers are liars was coinded after you

1:30 pm January 27, 2009

mazdamike wrote :

if everyone would just go out and buy an american car our economy would be so much better unlike the cars

2:21 pm January 27, 2009

MH wrote :

dealers are unnecessary. we should be able to buy direct from the manufacturer. just like I buy a computer (Apple Store) or a house (Toll Brothers).

3:25 pm January 27, 2009

David N wrote :

dealers are necessary for the following reasons:

1. I need to sit and drive the product. Does the ergonomics fit me? some cars I find hard to get in and out of.

2. where do I get warranty coverage? who makes repairs? Dealers specialize in their models, they have tools and techniques (or should have, the good ones do) that the average mechanic won't have.

5:30 pm January 27, 2009

salwsman wrote :

Yea buy a car off the net. when it breaks who are you going to get to honor the warranty? Have fun getting a huge automaker to loan you a car to get to work or taxi your children. things i do every day.

11:17 pm January 27, 2009

JUSTme wrote :

Karma.

2:30 am January 28, 2009

ChrisInMass wrote :

The industry is failing because of greed. The rich get richer, and the middle class get no raises to keep up with inflation, so every year our purchasing power becomes less and less. Don't let the government fool you about "their workers get compensated too much" because it's B/S, the autoworkers aren't to blame, it's the corporate greed and stagnant wages that have caused a majority of this.

3:34 am January 28, 2009

JDM wrote :

I bought a new car in 1972 and paid $5,700 (Chevy Malibu) for it, that year I made $15,000, which was pretty good back then. A comparable car today would cost me roughly $40,000. If wages and inflation kept pace I would need to make $105,000 a year to be in the same situation I was in 1972, but I only make $70,000. Do the math.

3:38 am January 28, 2009

JDM wrote :

By the way, I'm still at the same job I had in 1972, but in a management role now.

4:52 am January 28, 2009

Alabama wrote :

There are a lot of car dealers out there that need to find something else to do. Believe me, I have seen it first hand. Many are clueless about running a business. Sons, sons-in-law, daughters, etc. that have ruined the business that was given to them. And the factories have not helped as they continue to demand high dollar facilities and cram more product and programs down the dealers' throats. Oh yes, I almost forgot our good old government. They have their hand in the US auto collapse. Safety, EPA, blah, blah, blah. Too many government restrictions, etc. I am sick of hearing the Toyota Republicans telling US companies to build a better car that the people want to buy like Japan and Europe. That is a crock. US cars are as good or better. Japan and Europe have JD Power and Consumer reports in there back pocket. Think about it.

12:23 pm January 28, 2009

NormalGuy wrote :

$40,000 for a car equivalent to a 1972 Chevy Malibu. You spent 38% of your income on a car in 1972. That gives you ~ 26.6K this year. I bought a Honda Odyssey with Leather & DVD for 27k. I think that is a much better car than your 1972 Malibu. Sharpen your pencil and maybe you'll get a raise

12:27 pm January 28, 2009

Anonymous wrote :

GM has put some of the most pathetic looking vehicles on the market in the last 10 years and then wonder why they are losing sales. I say fire the design staff and get some new blood in there. They can keep the truck and Corvette team fire the rest.

1:05 pm January 28, 2009

Mike wrote :

We've off-shored a good portion of decent paying jobs and now no one can afford a car and/or a house... We all make 1980's wages, so looks like the industry needs to bring prices down to the 1980's level. Cars should cost no more that $12k.

1:06 pm January 28, 2009

BuyAmerican wrote :

American cars have better style and look better than anything the Japanese have ever or will ever come up with. The definition of bland ugly cars is anything Japanese.

As far as quality, I have only ever driven GM. My girlfriends and friends like the Japanese junk. I have taken them to the repair shop many times over the years and they have NEVER had to return the favor. That tells me more than some JD Power report that measures the first 90 days of ownership.

1:15 pm January 28, 2009

Jamiesmate2003 wrote :

But look at the math, as indicated by the sharper wits above, the % that a much better cars costs proportional to the primary sum is less. Problem has arisen because folks have taken on multiple "small" purchases till it bites them. Shame also that being commited to one company has got one poster no-where. Great management by that company to strip that branch bare.

1:19 pm January 28, 2009

BuyQuality wrote :

What is BuyAmerican smoking? Look at the facts, the residuals of any car not American designed and manufactured are 2 and 3 times that of GM, Ford and Chrysler. Who is he trying to Kid?

1:54 pm January 28, 2009

j33 wrote :

In 2007 the United States imported 7,160,096 passenger vehicles. Some of these vehicles had an import tax of 2-1/2% and some were tax free. Average United States tax collected on these imported vehicles, $275.00 each. By comparison $5,000.00 of a United States built Malibus sticker price of $20,000.00 goes for taxes. So here in our home market General Motors has a price disadvantage of $4,725.00 per passenger vehicle.

The free traders in our Congress passed these trade agreements. Now these free traders seem to be shocked that our automobile assembly plant has been shut down.

There is nothing you can do in the long run to save General Motors as long as these goofy, lopsided trade agreements are in effect.

1:56 pm January 28, 2009

mikal wrote :

dishonest dealers? please! car dealers have the smallest markup possible in the retail world. avg car is 2% profit if that after floor plan . go buy your furniture or your tv at 200% markup. besides that most all car sales especially in michigan are at locked in employee prices with minimal profit to the dealer.

2:11 pm January 28, 2009

SMI wrote :

most of the profit goes to the dlr.principal, holdback money goes 100% to the dlr.principal, sls.force gets a small percentage, and any repairs comes off his profit prior to the sale, not owner or top management, as for japanese cars, i'm on my third honda, love it, one problem i had, eyeglass holder did not stay shut, oh major repair, will never buy a union made car, they rip you off while they sit at the bar collecting through their job banks program at my expense to buy their junk, amazing, they gave up their college education because they thought they could do better, now your in your 40's, 50's, and where are you now, on the brink of unemployment and shutting down

2:48 pm January 28, 2009

BuyAmerican wrote :

You are right about the resale value. Some of that is due to massive quantities of cars sold to the rental fleets (would you want to buy a rental car unless you got it for nothing) and the other part is this false belief that American cars are not good. While the last part may have been true years ago, it is not anymore.
"In my own personal experience and my own opinion" domestic cars are better than japanese. Again this is only from my own experience. I could have had the only good cars that detroit ever built and my friends could have had the only bad cars the japanese ever built. As unlikely as that is, it is possible. I only ask that you not assume that today other cars are better than domestics based on the fact that 30 years ago detroit built mostly junk. Buy a domestic, drive it for 150,000 miles and then compare. If after that someone thinks domestics are not as good or better than others, I will gladly apologize.

2:51 pm January 28, 2009

CommonCents wrote :

Vehicles should have a SET price- ONE PRICE clearly marked and un-negotiable. Changes to that (promotions, etc.) should be attached to the window sticker from the manufacturer with the VIN # clearly identified and modification clearly outlined. Dealers charging THOUSANDS extra for the same exact vehicle to two different people (perhaps one is purchasing naive) is wrong. Also, no more employee discounts to the UAW Bubba's who make twice what most people do for unskilled labor. PS- Down with the UAW!!!

2:53 pm January 28, 2009

LMS wrote :

common sense- I totally agree.

3:24 pm January 28, 2009

CN wrote :

Toyota pays workers at its older U.S. plants up to $26 an hour and Honda pays $25, while the UAW rate at auto plants is $28.

Just about the same. What's the big deal?

5:01 pm January 29, 2009

clicking4cashisfun.com wrote :

if the dealers cant get financing to maintain their staff and inventories, and if customers cant get financed to buy a car, the entire scenario is one big clusteroo. the biggest chevy dealer in country went under for this very reason...and they overextended at a really bad time. Go figure

7:51 pm February 1, 2009

JDM wrote :

NormalGuy said: "$40,000 for a car equivalent to a 1972 Chevy Malibu. You spent 38% of your income on a car in 1972. That gives you ~ 26.6K this year. I bought a Honda Odyssey with Leather & DVD for 27k. I think that is a much better car than your 1972 Malibu. Sharpen your pencil and maybe you’ll get a raise"
I'm talking a "comparable vehicle to the Malibu, which would be more like a Mustang GT, so around $40,000 is comparable (my math was off a bit :P). A Honda Odyssey is nowhere comparable - even with leather and all the bells and whistles. Also, 38% of my salary going to a carloan is a bargain compared to most people. Take someone who makes around $40,000 per year ($8000/year over the national average) who buys a new car, the average retail on a new car nowadays is roughly $18,500, or 46% of their salary. Sure they can get a cheapo Hyundai for around $13K, but that's still 32.5% of their salary, and that's basically just 4 wheels and a seat. Wages certainly have not kept up with inflation, for the middle-class and the working poor that is. The pay gap between CEO's and upper management grow steadily every year when compared to lower management and non-salaried workers. In fact, since 1994 the average workers' wages have gone down 15% when adjusted for inflation while the upper echelon jobs have increased by 11% over the same period.

12:24 pm April 6, 2009

Curious wrote :

Some more news tied to a division of General Motors; GMAC

J. Ezra Merkin , former chairman of GMAC CHARGED With Civil Fraud …“failed to disclose conflicts of interest and collected over $470 million in fees for his three hedge funds, according to the complaint.

News Alert April 5, 2009
from The Wall Street Journal

New York Attorney General Andrew Cuomo charged J. Ezra Merkin with civil fraud, alleging he "betrayed hundreds of investors" by funneling $2.4 billion of clients' money into Bernard Madoff's multibillion dollar Ponzi scheme without their knowledge.

Cuomo doesn't allege that Merkin was aware of Madoff's scheme. The complaint alleges that Merkin, a New York financier and former chairman of GMAC, raised billions from charities, universities and individuals, and lied about putting the bulk of it with Madoff. He failed to disclose conflicts of interest and collected over $470 million in fees for his three hedge funds, according to the complaint.

Curious: Was Merkin instrumental in the design and input on the new GM Promise Program. Buyers beware ! enough said.

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The car industry, particularly Detroit’s GM, Ford and Chrysler, is going through a time of significant change and upheaval. Keep track of the latest news with dispatches from the reporters in WSJ’s Detroit bureau. Please post your comments on the blog, or email us at autoshow@wsj.com.

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